Your Top Hiring and Recruitment Questions Answered: Sourcing Sales Leadership
Hiring sales leadership marks a major developmental milestone for your business—it means your product has gained momentum and you’re ready to add that layer of strategic planning above the person managing your sales reps.
But deciding when to make that sales leader hire and determining what professional profile is best suited to the needs of your org poses a real challenge to CEOs and founders.
And the current state of the talent market isn’t making it any easier.
Last month we hosted a Talent ‘Ask Me Anything’, where we answered CEO, founder, and hiring manager’s most pressing questions about all things hiring and talent.
It didn’t take long for the issue of sourcing sales leadership to emerge as a top-of-mind topic. Here are the top questions asked about sourcing sales leadership and talent.
Do sales leaders with enterprise SaaS experience struggle adapting to a product-led growth (PLG) model?
We’ve been talking about PLG at OpenView for years, but in the grand scheme of things, it’s still a relatively new movement in go-to-market motions. Some companies are born PLG and in the natural progression of their business over time, they eventually layer in enterprise sales.
An enterprise leader’s ability to adapt to a PLG model depends more on whether that individual can complement their enterprise DNA with a PLG motion, using the virality of the product to get them into customer introductions. There are more and more PLG go-to-market leaders who have developed that track record and that playbook, and it’s easier for them to go up into the enterprise because they likely have that traditional outbound sales training from some other point in their career.
The key to PLG and enterprise is timing. You’ll probably have a harder time bringing a pure enterprise seller into an early PLG business if the motion isn’t yet ready for it. It depends both on when your products are ready and when you’re making the right amount of revenue for that enterprise leader to make the most impact.
When sourcing for earlier stage revenue leadership, do you find it more common to hire a VP of sales who will ultimately grow into a CRO role, or hire an outside CRO and level the VP as the company grows?
We actually navigate this dilemma a lot. One of the more common reasons we see sales leader searches ultimately fail is when companies hire people whose experience with mature companies is beyond where the employer is at with their go-to-market motion.
A lot of series A or B companies who are between that $2 million to $5 million ARR mark are starting to accelerate customer acquisition and their go-to-market motion becomes more predictable. This is where they decide they need a sales leader.
Typically, this means transitioning from founder selling or one director-level sales leader who’s been there since the beginning. This director-level person may have done a great job getting the company to where it is today, but now they need to get ARR from $5 to $20, $30, and beyond. In my opinion, this still lies in the realm of VP sales. You might see some CRO titles in these early-stage businesses, but typically that’s just from title inflation.
Even at $5 million or $10 million ARR, there’s still so much that needs to be built. You’re still learning your customer base and working on product features and capabilities. It’s likely that your VP sales will need to have that player-coach motion with sales ICs to get deals over the finish line.
True CROs typically come in closer to the $15 to $20 million ARR mark. At this point, a lot of the momentum is already there and you can start thinking of a regional strategy. What a CRO is going to do is establish a line of management, where they build in more of the strategy for scale and are not so much in the weeds. If you have a CRO that’s too close to the ICs, that’s where you might get some friction and make them feel like they joined too early.
I recommend holding off on a CRO until you feel like you’re ready to make that run to $50 million. At that point, you’ll likely need a sales leader that’s been through that growth phase before, either in the #1 or #2 sales seat, and now ready to own it themselves.
When doing so, it’s also crucial to have a transparent conversation with your existing sales leader. Bringing in a CRO can be misunderstood by the sales leader as a negative reflection of their own work, so it’s important to clarify that this decision is being made to best enable the business and the individual.
By bringing in a CRO that has been in this situation before, the existing sales leader will have a strong mentor to learn from. Being part of a successful journey in scaling to the next revenue milestone can empower them to progress into a higher-level leadership role down the road in their career once they have that experience.
When companies are ready for a CRO, do you see them bringing them into sales, marketing, and CS versus just being a global head? How do you see that division happening?
In earlier-stage businesses, it’s more common for the CRO to own sales and CS. Depending on where you are from a revenue standpoint, you may have reached a point where it’s worth considering a CMO. We see a lot of CRO/CMO combinations where it just feels more natural to have all of sales and CS roll into the CRO.
If you have a less experienced marketing team, folding marketing under the CRO is definitely an option. We often see that full revenue leadership comes in as businesses get to a later stage. So it’s more common to have a CRO manage sales and CS, and possibly marketing in the future.
Right person, right time
The importance of building out a strong sales org can’t be understated. But it takes matching a person with the right skillset to come in and the right stage of your business for your sales for this hire to make the greatest impact.
But this isn’t an easy hire to make. In fact, the first VP sales hire in a start-up is notorious for quick churn—likely leaving the company within the first year.
In a time when recruiting executive talent can be harder than finding a needle in a haystack, making the right hire the first time around is more important than ever.
Your perfect fit is out there, and the good news is that a strong recruiting strategy can help win them over to your team.
Learn more about sourcing sales leadership in 2022 by downloading the State of SaaS Talent Market report.